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General Motors (GM) has announced it’ll cut thousands of jobs, close thousands of dealers, and eliminate the Pontiac brand over the coming months. The GM announcement came during a press conference Monday.
The GM Announcement
GM’s announcement indicates up to 8,000 U.S. factory jobs will be cut and 2,600 dealers will be closed by 2010. The Pontiac line of vehicles will become history, allowing GM to instead focus on “four core brands” of Chevrolet, Cadillac, Buick and GMC.
“The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest,” the company says. Thus far, GM is engaged in “talks” about the Saab and Hummer brands, according to the Detroit Free Press — but the Saturn brand has yet to spark interest that could allow it to be built past the end of the year, the paper reports.
The full GM announcement follows.
General Motors (NYSE: GM) today presented an updated Viability Plan that will speed the reinvention of GM’s U.S. operations into a leaner, more customer-focused, and more cost-competitive automaker.
The Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.
Revised Viability Plan goes further and faster
The Viability Plan announced today builds on the February 17 Viability Plan submitted to the U.S. Treasury. The revised Plan accelerates the timeline for a number of important actions and makes deeper cuts in several key areas of GM’s operations, with the objective to make us a leaner, faster, and more customer-focused organization going forward.
Significant changes include:
- A focus on four core brands in the U.S. – Chevrolet, Cadillac, Buick and GMC – with fewer nameplates and a more competitive level of marketing support per brand.
- A more aggressive restructuring of GM’s U.S. dealer organization to better focus dealer resources for improved sales and customer service.
- Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.
- Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a U.S. total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.
“We are taking tough but necessary actions that are critical to GM’s long-term viability,” said Fritz Henderson, GM president and CEO. “Our responsibility is clear – to secure GM’s future – and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team.”
Fewer U.S. brands, nameplates, and dealers
As part of the revised Viability Plan and the need to move faster and further, GM in the U.S. will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC. The Pontiac brand will be phased out by the end of 2010. GM will offer a total of 34 nameplates in 2010, a reduction of 29% from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries. This four-brand strategy will enable GM to better focus its new product development programs and provide more competitive levels of market support.
The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest. Updates on these brands will be provided as these initiatives progress.
Working with its dealers, GM anticipates reducing its U.S. dealer count from 6,246 in 2008 to 3,605 by the end of 2010, a reduction of 42%. This is a further reduction of 500 dealers, and four years sooner, than in the February 17 Plan. The goal is to accomplish this reduction in an orderly, cost-effective, and customer-focused way. This reduction in U.S. dealers will allow for a more competitive dealer network and higher sales effectiveness in all markets. More details on these initiatives will be provided in May.
Sales volume and market share projections
The Viability Plan anticipates improved financial results despite more conservative U.S. sales volume expectations going forward. The lower volume expectations are the result of managing the business with fewer nameplates and dealers, leaner inventories, and reduced market share. To address the inventory issue, GM on April 23 announced U.S. production schedule reductions of approximately 190,000 vehicles during the second and early third quarters of 2009.
The Viability Plan also reduces GM’s market share projections to adjust for the impact of the brand and dealer consolidation, as well as for the short-term impact of speculation regarding a GM bankruptcy. The plan assumes a 19.5% share in 2009, with share stabilizing in the 18.4 to 18.9% range in subsequent years.
“We have strong new product coming for our four core brands: the Chevrolet Camaro, Equinox, Cruze and Volt; Buick LaCrosse; GMC Terrain; and Cadillac SRX and CTS Sport Wagon and Coupe,” said Henderson. “A tighter focus by GM and its dealers will help give these products the capital investment, marketing and advertising support they need to be truly successful.”
Lower structural costs, lower breakeven point
The Viability Plan also lowers GMNA’s breakeven volume to a U.S. annual industry volume of 10 million total vehicles, based on the pricing and share assumptions in the plan. This lower breakeven point (at an adjusted EBIT level) better positions GM to generate positive cash flow and earn an adequate return on capital over the course of a normal business cycle, a requirement set forth by the U.S. Treasury in its March 30 viability plan assessment.
GM will lower its breakeven point by cutting its structural costs faster and deeper than had previously been planned:
- Manufacturing: Consistent with the mandate to accelerate restructuring, we plan to reduce the total number of assembly, powertrain, and stamping plants in the U.S. from 47 in 2008 to 34 by the end of 2010, a reduction of 28 percent, and to 31 by 2012. This would reflect the planned acceleration of six plant idling/closures from the February 17 plan, and one additional plant idling. Throughout this transition, GM will continue to implement its flexible global manufacturing strategy (GMS), which allows multiple body styles and architectures to be built in one plant. This enables GM to use its capital more efficiently, increase capacity utilization, and respond more quickly to market shifts.
- Employment: U.S. hourly employment levels are projected to be reduced from about 61,000 in 2008 to 40,000 in 2010, a 34% reduction, and level off at about 38,000 starting in 2011. This further planned reduction of an additional 7,000 to 8,000 employees from the February 17 Plan is primarily the result of the previously discussed operational efficiencies, nameplate reductions, and plant closings. GM also anticipates a further decline in salaried and executive employment as it continues to assess its structure and execute the Viability Plan. More details will be announced as soon as they are finalized with the various stakeholders.
- Labor costs: The Viability Plan assumes a reduction of U.S. hourly labor costs from $7.6 billion in 2008 to $5 billion in 2010, a 34 percent reduction. GM will continue to work with its UAW partners to accomplish this through a reduction in total U.S. hourly employment as well as through modifications in the collective bargaining agreement.
As a result of these and other actions, GMNA’s structural costs are projected to decline 25 percent, from $30.8 billion in 2008 to $23.2 billion in 2010, a further decline of $1.8 billion by 2010 versus the February 17 Plan.
Strengthening GM’s balance sheet
Another key element of GM’s restructuring will be taking the necessary actions to strengthen its balance sheet. GM today took an important step in improving its balance sheet by launching a bond exchange offer for approximately $27 billion of its unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity.
“A stronger balance sheet would free the company to invest in the products and technologies of the future,” Henderson said. “It will also help provide stability and security to our customers, our dealers, our employees, and our suppliers.”
Another important part of improving the balance sheet will be the ongoing discussions with the UAW to modify the terms of the Voluntary Employee Benefit Association (VEBA), and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50% of GM’s outstanding U.S. Treasury debt at June 1, 2009, and at least 50% of GM’s future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions.
In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction.
Throughout the Plan, GM will continue to make significant investment in future products and new technologies, with an investment of $5.4 billion in 2009, and investments ranging from $5.3 to $6.7 billion from 2010 to 2014. Very importantly, development and testing of the Chevy Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.
“The Viability Plan reflects the direction of President Obama and the U.S. Treasury that GM should go further and faster on our restructuring,” Henderson said. “We appreciate their support and direction. This stronger, leaner business model will enable GM to keep doing what it does best – provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country’s economy and environment.”
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1903 - Cadillac Model A Runabout with rack-and-pinion steering, variable intake-valve timing debuts at the New York Auto Show. Powered by a single-cylinder 10-horsepower engine, it traveled at over 30 miles per hour and got 25 miles per gallon.
1905 - The Osceola was Cadillac's first concept car and featured the first fully-closed body. General Motors acquires Cadillac for $5,969,200.
1908 - Cadillac becomes the "Standard of the World" and the first American automobile manufacturer to win the Dewar Trophy.
1909 - Cadillac offers the world's first limousine.
1912 - Cadillac offers the Delco Electric Self-Starter; becomes the first and only company to win the Dewar Trophy twice.
1915 - Cadillac produced the first full-armored car; created the first mass-produced V8 engine - it was also the first engine to use thermostatically controlled water-cooling technology.
1922 - With innovations like the standard windshield wiper and rearview mirror, demand intensified with production exceeding over 20,000.
1924 - Cadillac pioneered the use of fast-drying Duco lacquer paints and offer over 500 color combinations while most competitors only offered black.
1926 - Cadillac becomes the first automobile manufacturer to develop a comprehensive nationwide service policy.
1930 - Cadillac produces the world's first V-type 16-cylinder engine for passenger cars. It was smooth, quiet and powerful with 160 horsepower from 452 cubic inches.
1934 - Cadillac introduces the world's first independent front suspension on its entire line of automobiles.
1937 - The Cadillac Lasalle V8 set a new speed and endurance record at the Indianapolis 500 with an average speed of 82 miles per hour.
1938 - Cadillac introduces the first sunroofs in America: The Sunshine Turret Top
1940 - Cadillac introduces the first fully automatic transmission: The Hydra-Matic transmission.
1949 - The Cadillac Coupe DeVille introduced the world's first pillarless two-door hard top body style; Cadillac created their first overhead valve, high-compression V8 engine with 160 horsepower from 331 cubic inches.
1953 - The Cadillac Eldorado, America's dream car for a record 23 years, was introduced with the industry's first wrap-around windshield, the first signal-seeking automotive . radio, and the Autronic Eye - the first automatic headlight dimmer. Other innovations were leather upholstery and chrome wire wheels.
1954 - Cadillac becomes the first auto manufacturer to offer power steering as standard equipment on its entire line of automobiles.
1957 - The Eldorado Brougham introduced the first quad headlamps, six-way power seats with memory, automatic door locks, forged aluminum wheels and an air suspension.
1964 - Cadillac debuted with the industry's first automatic climate control system: Comfort Control; Cadillac debuted an industry-first "Twilight Sentinel" system which automatically turned the headlights off and/or on at dusk/sunrise.
1965 - Cadillac introduces automatic load leveling and tilt/telescopic steering wheels.
1967 - The Cadillac Eldorado perfects front-wheel drive with a smoother, quiter ride than other luxury cars of its day.
1969 - Cadillac introduces the industry's first closed cooling system, making overheated engines a thing of the past.
1971 - Cadillac offers "Track Master", an advanced, computerized rear-wheel skid-control braking system as optional equipment.
1974 - Cadillac pioneered the use of the air cushion restraint (air bag) system.
1975 - Cadillac becomes the first U.S. auto manufacturer to install electronic fuel injection and introduces the catalytic converter.
1978 - Cadillac becomes the first auto manufacturer to test digital computerization in cars.
1987 - The Cadillac Allante becomes America's first automobile to compete in the ultra-luxury market. This two seater was designed and built in Italy by the renowned coach-building firm of Pininfarina.
1988 - Cadillac is the first American luxury carmaker to implement a 24-hour, 365 day-a-year roadside service program.
1990 - The Cadillac Allante becomes the first front-wheel drive vehicle with electronic traction control.
1992 - Cadillac introduces the first 32-valve V8 engine (1993 model year): the Northstar
1999 - Cadillac offers the first automotive application of thermal-imaging technology: Night Vision.
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These are the steps followed to change the plugs and wires.
• 1 Remove the engine cover (after opening the hood)
• 2 Remove the strut brace. This is easy and gives you a lot of room to work
• 3 Remove the coil pack. Two bolts on the back and two bolts on the side (10mm). This will give you easy access to all four rear spark plugs.
• 4 Remove the spark plug wire and change the spark plug. Do one plug at a time. You should not have any problem removing the plugs in the back. Use a spark plug socket - the one with rubber to hold the spark plug in place and an extension.
• 5 Change the spark plug wires one at a time making sure you put it back on the correct terminal. This is pretty foolproof. The number of the cylinder is labeled on the block and the terminal is labeled on the coilpack AND in some case it is labeled on the wire as well.
• 6 Put everything back in place.
The fuel filter is on the driver's side of the car underneath the (rear) door.
• 1 Remove the fuse and run the car until it stalls. This will remove most of the pressure from the fuel line.
• 2 Jack the car.
• 3 Locate the fuel filter and remove it. used a screwdriver to break the plastic piece that holds it there - I'm pretty sure there's a better way to do it.
• 4 Put the new filter in place using the new plastic retainer.
• 5 Don't forget to put the fuse back!
Clean the throttle body bore to eliminate and sticky throttle feel and/or idle speed control issues. Just hold the throttle open and spray the bore with carb cleaner and scrub with an old toothbrush. Disconnect the battery negative cable for 30 secs to reset the idle speed learn offsets for the clean throttle body.
Service the coolant system... This is the single most important thing to insure long life of the engine. The green silicated coolant needs to be replaced every 2-3 years / 24-32 K miles to maintain an adequate concentration of corrosion inhibitors in the coolant. Replace the coolant with fresh 50/50 coolant/distilled water and add the coolant supplement to the radiator hose as described.
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It is not unusual for a Northstar to use more oil than some other engines. It is a high performance engine and has to allow a little more oil to the top rings for lube as as well as down the 32 valve guides.
Design intent for oil consumption would put the engine at about 4000 miles per quart consumption but due to the variables in production parameters there are engines that will use 1 quart per 1000-1500 miles.... perfectly normal and acceptable... but more oil consumption than "intended". Nothing will be wrong with the engine but the continuous oil adds are aggravating. If this is the case then understand that the engine is probably going to run a long long time like that as the cylinder walls , rings, valve guides, etc. like all that oil that you are putting in and the continuous oil adds fortify the used oil in the sump and replenish the additive package in the oil that is slowly depleted under normal usage.
Comparing the 4.9 to the Northstar is an apples to oranges deal. The 4.9 is an excellent engine for it's purpose but does not offer nearly the performance, durability, fuel economy and emission control capability of the Northstar. The Northstar is a high output engine and likes to be "used".
The best way to minimize oil consumption in a Northstar is to keep the sump filled slightly low (many are continuously overfilled) by only checking the oil level when hot and only filling the sump with 7 quarts of oil (7.5 with a dry filter at a change.) A typical 8 quart fill at a change is "required" to put the oil level on the full mark when cold but is actually overfilling the crankcase promoting oil consumption.
Use conventional mineral oil (synthetic is not required at all) as it tends to provide better oil consumption.
An last, but not least, air the engine out frequently. It likes to be used and red-line upshifts at WOT help promote clean combustion chambers, exercise the piston rings to keep them free of carbon buildup and keep them mobile and to ensure the engine is broken in and maximum sealing is obtained. The Northstar does not like to be babied around. It likes to be run hard frequently with a WOT blast in merging or whatever.... Even engines reported to use 1 quart per 1500 miles tend to improve to 2500 miles per quart or better when subjected to a regular schedule of use and "abuse"...
The subject of oil consumption really does not have a "final" answer. The fact is that there is some variability in oil consumption in all production engines.... regardless of who makes them on which continent. All the manufacturers recognize this and virtually all of them will call oil consumption as great as 1 quart in 1000 miles "normal" "acceptable" "allowable" "within production tolerances" etc... This doesn't mean that all engines will get 1000 MPQ or that the engine was designed to get 1000 MPQ...it just recognizes the fact that there are going to be some engines that get 1000 MPQ that will be perfectly fine upon disassembly and will have nothing "wrong" with them.
The variables that usually enter into oil consumption are primarily associated with the piston/ring/cylinder bore. The number of valves or type of valve actuation has little to do with it.
The single biggest variable and the one that has been discussed at great length on this forum is the cylinder bore finish or the cylinder honing pattern. The higher performance the engine is the more attention must be paid to the honing pattern and retention of oil on the cylinder walls to lubricate the piston and rings at full load , high RPM operation. The Northstar engine uses a very aggressive cylinder bore finish that tends to retain a lot of oil to protect the piston and rings. When the blocks are honed at the factory there is a tolerance in the bore finish due to the fact that the honing stones will wear and need replacement. A brand new stone gives a slightly more aggressive pattern than a "used" stone....so a block honed with new stones will have a more aggressive finish and most likely will use more oil.
Another variable is bore roundness. Like it or not, the bores tend to "move" slightly as the engine heats up and cools down and bolt tensions relax, etc. over time. All this contributes to slight bore out of roundness that is not bad or good...just different.
Carbon buildup in the rings and ring sealing are also variables that come into play with break in, operating schedule, type of oil used, etc.
The one thing that I can attest to is that many, many customer oil consumption complaint engines have been torn down with absolutely nothing wrong found. The engines are often reassembled and put into test cars and driven by the engineers and more often than not the high oil consumption does not repeat itself !!! The single biggest common cause seems to be breakin...or lack there of. Many, many oil consuming NOrthstar engines are "fixed" by some full throttle operation. I often joke about "driving it like you stole it" but it really is no joke. The Northstar engine was designed as a high performance engine to be run hard and fast. Those that are run hard typically exhibit excellent ring seal, little carbon build up and good oil economy. We have seen engines with tens of thousands of miles on them that the rings have not sealed or mated to the sides of the ring grooves because the operating schedule was so light duty. The moral here is to flog it .... often.
In any case, the nice thing about the engines with the more aggressive honing pattern is that the pistons, rings and bores will last forever. It is very common to tear down a 200,000 mile Northstar engine and still see the original honing pattern in the cylinders. There is never any sign of cylinder wall wear and the idea of a wear "ridge" at the top of the cylinder bore is something that is laughable on a Northstar.
The other nice thing about a little oil consumption is that it adds tremendous safety factor to the oil change interval. Nothing could be better for the engine than an occasional quart of fresh oil. You can take the worst oil on the market and add a fresh quart every 1000 miles and over the life of the engine the wear will be better than an engine run on the best oil with no adds between changes.
While no one in the engineering community wants high oil consumption the fact is that there is some variability in the oil consumption of an engine manufactured at the rate of 1200 per day. The specs of what is "normal" simply reflects this...it does not imply that all engines would get this or that something is wrong with and engine that gets more or less oil consumption.
There have been a lot of engineering changes over the years on the Northstar aimed at reducing the overall oil consumption and reducing the variability in the oil consumption of different engines. Many changes have been made to the honing process to make it more consistent. Changes to the piston and ring groove treatment have been made to make it more resistant to wear, pound out and micro welding at low oil retention rates. Regardless, there is still some variability.
One other thing that affects oil consumption, or the customers perception of oil consumption, is the move toward longer and longer change intervals. With the allowable change interval reaching as high as 12,500 miles on a 2003 Northstar if the oil life monitor is followed this could mean the addition of 3,4 or 5 quarts of oil to a very healthy engine. If the owner changes their oil every 2000 or 3000 miles, despite the oil life monitor recommendations, then they would not have to add any oil between changes. The oil consumption is the same....the amount added between changes is all that is different. Yet, many customers do not make the distinction. Field surveyors repeatedly show that "acceptable" oil consumption means "not having to add between changes"...whatever MPQ that is...???
The issue of oil consumption is very emotional , too, as many people perceive higher oil consumption as 'poor quality" or an indication that something is wrong. Blue smoke, fouling plugs, noise, etc...is a sign of something wrong. Using 1 quart in 1000 miles might be perfectly normal for an engine that has the high limit "rough" hone finish and is perfectly in spec...yet it will be perceived differently.
The Northstar engine in particular was designed to be a high performance engine and to perform well at high speeds and high loads. The engines are tested at loads and speeds for time periods few customers will ever be able to duplicate. It is unfortunate that the engineering that goes into making the engine capable of such running sometimes contributes to more oil consumption... especially as the production machining tolerances are taken into account.
The items mentioned about overfilling also apply. Make sure that the system is not overfilled as any excess oil will be pushed out the PCV. The best bet is to always check the oil hot and keep it midway between the add and full mark. Don't always top off and don't top off cold to the full mark as that will overfill the sump.
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People walk through the parking lot at the General Motors Canada Oshawa Car Assembly Plant in Oshawa. GM says it will add a third shift at its Oshawa assembly plant and hire more people for its CAMI plant in Ingersoll, Ont. THE CANADIAN PRESS/Nathan Denette.
OSHAWA, Ont. - As a sign that GM Canada is recovering from the worst crisis in its history, more than 600 laid-off workers will be recalled this year as the automaker adds a third shift at its Oshawa assembly plant and ramps up its factory in Ingersoll, Ont.
The automaker, which had to shut down most of its North American operations for weeks last year due to weak demand and the near-collapse of its parent company, says the changes are in response to growing customer demand for the Chevrolet Equinox and GMC Terrain.
The vehicles are currently produced at the CAMI plant in Ingersoll, in southwestern Ontario. But GM Canada plans to do some of the Equinox work at its main manufacturing location in Oshawa.
A third shift in Oshawa is will be added in October to do the work, with about 600 laid-off employees there to be recalled. All the laid-off employees at CAMI will be recalled and 70 new jobs are expected to be added by August.
"We're excited as hell. Quite frankly I've got goosebumps today," CAW president Ken Lewenza told The Canadian Press.
"We are excited and we are relieved to see actual employment as a result of the hot products General Motors has on the market today."
GM's move is timely for workers who have been hit hard by the economic downturn that brought the North American auto industry to its knees last year, he added, saying most of GM's laid-off workers have nearly exhausted their employment insurance and other social benefits.
Lewenza says his union won't spend too much time celebrating the recent hires at General Motors, but will instead focus on growing demand for vehicles and ensuring long-term security for its members.
The Canadian Auto Workers local that represents GM wokers in Oshawa has also scheduled a morning press conference in Oshawa to comment on the announcement.
GM Canada's new president, Kevin Williams, says the plans announced Friday are the latest in a series of growth initiatives for the company.
"By the end of this year, we expect to recall all laid-off production employees in Oshawa to support the new Equinox, Regal and Camaro convertible production planned there and, at CAMI, we will even be hiring some new workers - truly great news for the employees, dealers, suppliers and communities affected," Williams said in a statement Friday.
The company and its American parent were nearly felled last year by the economic downturn, which compounded years of losses for General Motors - which had been Canada's and the world's biggest automaker for decades.
After a brief stay under court protection last year and billions of dollars in financial support from Washington, Ottawa and the Ontario government - as well as concessions from its workers - General Motors has begun to get itself back into gear.
Across the country, GM employs 9,000 people in Canada - mostly in Ontario where all its parts and assembly plants are located.